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  1. #29
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    MOSCOW, February 19, 2008 -- The presidents of Russia and Algeria, two of the biggest suppliers of natural gas to Europe, were to discuss energy ties in the Kremlin on Tuesday amid a drive to create an OPEC-like gas cartel.

    Algerian President Abdelaziz Bouteflika told Russia's ITAR-TASS news agency in an interview published on Tuesday ahead of his meeting with President Vladimir Putin that gas exporters should "coordinate" their energy policies.

    Asked about plans for a cartel, Bouteflika said: "It's clear that countries such as Russia, Qatar and Algeria already play a major role on international gas markets and they should coordinate their activities even more."

    He also said that the Gas Exporting Countries Forum (GECF), set up in Tehran in 2001, should "play a more active role" and that gas suppliers to the European Union should team up against "restrictive laws" on energy imports.

    Russia accounts for 45.1 percent of the European Union's gas imports, Norway 24.1 percent and Algeria 20.6 percent, with the latter's share expected to rise, according to EU data.

    European officials have expressed concern over the prospect of closer energy ties between Algeria and Russia, particularly after Russian and Algerian state energy companies Gazprom and Sonatrach signed a cooperation deal in 2006.

    "We can cooperate more on gas supplies to Europe," Algeria's speaker of parliament, Abdelaziz Ziari, told the Vremya Novostei daily.

    "Algeria and Russia are among the world leaders in gas exports and our countries could coordinate their activities," Ziari said.

    The GECF, whose members control around three-quarters of the world's known reserves, is to meet in Moscow later this year and analysts have said it could aim for greater coordination of prices and supplies.

    Bouteflika said that the Organisation of Petroleum Exporting Countries (OPEC) had been formed in the 1960s to defend the interests of oil exporters and to ensure that oil revenues are shared out fairly.

    "This lesson should not be forgotten" by gas exporters, he added.

    Bouteflika's first official visit to Moscow follows a trip by Putin to Algiers in 2006 in which Russia wrote off Soviet-era debt in exchange for arms purchases by Algeria of around seven billion dollars (4.8 billion euros.)

    But military ties between the two countries were clouded on Tuesday after Algeria said it wanted to return 15 Mig-29 fighter jets bought from Russia because of their low quality, Russian newspapers reported.

    "The announcement of the annulment of the Algerian contract is the first major scandal in Russia's military-technical cooperation with foreign states," the Izvestia daily said.

    On Monday, Kommersant cited an official from Russia's state United Aerospace Corporation saying that Russia could take the jets back but only if Algeria agreed to buy different planes.

    Kremlin spokesman Dmitry Peskov said that military cooperation was on the agenda for the meeting between the Russian and Algerian presidents but declined to give details.

  2. #30
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    Moscow February 19, 2008:
    Algeria's President Abdelaziz Bouteflika attends a wreath-laying ceremony
    at the Tomb to the Unknown Soldier at the Kremlin wall

  3. #31
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    Mardi 19 février 2008 -- Le président Abdelaziz Bouteflika, en visite officielle mardi en Russie, prône plus de coopération entre Moscou et Alger sur le marché gazier, dans une interview publiée par l'agence russe Itar-Tass. «Il est évident que des pays comme la Russie, le Qatar et l'Algérie jouent un rôle important sur les marchés gaziers et doivent plus coordonner leurs activités», a déclaré M. Bouteflika qui doit être reçu dans l'après-midi par son homologue russe Vladimir Poutine.

    Interrogé sur la création d'une "Opep de gaz", M. Bouteflika a appelé à ne pas "oublier la leçon" de la création du cartel pétrolier. "La défense des intérêts des pays membres de l'Opep (...) a été à l'origine de la création de l'Opep en 1960. Cette leçon ne doit être oubliée", a-t-il souligné. "L'augmentation de la part du GNL (gaz naturel liquéfié) dans le commerce international du gaz et l'intensification de l'unification des réseaux de distribution préparent le terrain pour créer un marché gazier semblable à celui du pétrole", a-t-il poursuivi.

    M. Bouteflika a aussi appelé à "améliorer le fonctionnement" du Forum des pays exportateurs de gaz (FPEG) qui "doit jouer un rôle plus actif dans l'échange d'informations entre ses participants". Des recommandations dans ce sens doivent être présentées lors de la prochaine réunion du FPEG prévue à Moscou cet été.

    Les conjectures sur la création d'un cartel du gaz se sont amplifiées depuis la signature en 2006 d'un accord de coopération entre le géant russe Gazprom et la compagnie Sonatrach. Cette idée inquiète les pays consommateurs qui craignent que cela ne favorise une hausse des prix du gaz qui ont déjà beaucoup augmenté.

  4. #32
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    Mardi 19 février 2008 -- Le président russe Vladimir Poutine a appelé mardi à une plus grande coopération énergétique entre la Russie et l'Algérie, tous deux grands producteurs d'hydrocarbures, lors d'un entretien avec son homologue Abdelaziz Bouteflika. «L'Algérie est le quatrième exportateur mondial de gaz. La Russie est l'un des plus importants. Il est extrêmement important d'être en contact sur les problèmes énergétiques, d'autant plus que cette année l'Algérie est présidente de l'Opep», a déclaré M. Poutine au début de la rencontre au Kremlin, à laquelle la presse était présente.

    M. Poutine a aussi évoqué des "questions à discuter" dans le "domaine commercial" et le "domaine militaro-technique". "En 2012 l'Algérie entrera dans une zone de libre-échange avec l'Union européenne. Nous ne voudrions pas que nos entreprises se retrouvent dans une situation difficile sur votre marché", a-t-il dit.

    Dans le domaine militaire, Alger s'apprête à rendre à Moscou 15 chasseurs Mig-29 livrés en 2006-2007 en raison de leur qualité inférieure aux attentes, selon la presse russe. La Russie lui proposerait de les remplacer par des avions plus modernes mais plus chers, les Mig-29M2 ou Mig-35.

    M. Bouteflika a aussi insisté sur la nécessité de relancer la coopération commerciale entre les deux pays. "Sur le plan du commerce, nous ne pouvons être satisfaits, ni vous ni moi. Il faudrait savoir pourquoi 2006 a été meilleur que 2007", a dit le président algérien qui s'exprimait en français.

  5. #33
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    MOSCOW, February 19, 2008 (RIA Novosti) - Algeria will return 15 MiG-29SMT (Fulcrum) fighters purchased from the MiG corporation in 2006-2007 to Russia. The deal on the return was signed shortly before Algerian President Abdelaziz Bouteflika visited Moscow.

    The ensuing scandal was picked up by the press.

    This is an unpleasant incident not only because Algeria has thereby expressed its dissatisfaction over the quality of Russian exports. This brings into doubt the entire military-technical cooperation between the two countries with a price tag of $7 billion. This is the sum of the contracts signed by Russian representatives during Vladimir Putin's visit to Algeria.

    This is the first demonstrative return during Russia's entire military-technical cooperation with foreign countries. What is the reason behind it?

    Although military-technical cooperation is a sensitive subject, and not everything is known for sure, experts see many reasons behind this decision. One of them is the struggle between different political groups and clans in Algeria. Arms supplies always involve middlemen who receive impressive shares for their services. Those who get nothing are naturally displeased about this. Intrigues are always part of these deals, but when those who sign the contracts possess real power, scandals never acquire global dimensions.

    Competition is another reason. Paris was going to sell its own Rafale fighters to Algeria, but the Algerians opted for the MiGs. The terms of the contract were very good. First, the price of the Russian fighters was much lower and the characteristics were very much the same. Second, by buying the fighters Algeria was paying off its debt to the former Soviet Union and its successor Russia. Moreover, as part of the payment, Russia offered to take back 36 old MiGs that had been bought by Algeria from Ukraine and Belarus, and flown by the Algerian Air Force. Who would refuse such incentives?

    It is hard to believe that the MiG-29SMTs (one-seat and two-seat combat and training versions) were of poor quality. Off the record, Russian arms exporters maintain that before being sent to the south Mediterranean coast, the fighters were approved by Algerian experts. They also checked them up upon arrival in the country, and even started flying them. How can they now complain of defects, used spare parts or rusted units? Why didn't they see them before? But the time for rhetorical questions has gone. Russia has signed the deal on the return of 15 fighters and is obliged to take them back.

    However, the Algerian experts are right when they talk about a drop in quality of Russian arms exports. This is openly admitted by top-ranking officials in charge of the Russian military-industrial sector, such as First Deputy Prime Minister and head of the military and industrial commission Sergei Ivanov and his first deputy Vladislav Putilin.

    At a recent Academy of Military Sciences conference, Putilin said that "although the enterprises of the military-industrial sector have increased their turnout by more than 14% (military production went up by 19.1%, and civilian by 7.6%), some of them are simply unable to fulfill state-awarded contracts. Moreover, they cannot even use the allocated funds. The federal budget has long been generous. Thus, 800 billion rubles ($28 billion) were earmarked for defense purposes for 2008, 900 billion rubles ($33 billion) for 2009, and 1.1 trillion rubles (40 billion) for 2010."

    The reasons for this situation are well known. Highly qualified personnel have come close to retirement age. Machines and technologies are becoming obsolescent - capital equipment in the defense industry is more than 30 years old. Major technologies have been lost, usual contacts severed, and the required raw materials and equipment are in short supply. The price of energy has skyrocketed. It is leaving the inflation rate far behind and greatly exceeds the deflators fixed by the Ministry of Economic Development and Trade.

    It is already clear that the 2006-2015 state defense order endorsed just two years ago will not be fulfilled either in the range or number of products. This is the third order that the defense industry will not be able cope with.

    Graduates of technical colleges are reluctant to work in the defense industry. Salaries are rather low, and career opportunities cannot compete with those in the oil and gas industry. In order to become a leading expert, a graduate has to work in the defense sector for at least 10 years. This is a slow process.

    And there is another reason. Before, young people were not drafted if they worked at a military plant called a mailbox. Now this benefit does not exist. After graduating from a technical vocational school or college, young people take any job rather than going to a place where getting a foreign passport may become a hassle.

    One more problem is that technical vocational schools no longer exist. Nobody is training future workers. Good turners, assembly fitters and welders are worth their weight in gold. Without them, it is impossible to build high-quality aircraft, ships, or missiles.

    Putilin said that the "reasons for this situation in the defense industry are known. Talk about these problems in different formats and by all branches of power has become a ritual, but it is not always possible to coordinate the efforts by federal executive bodies, organizations, and enterprises aimed at removing these obstacles."

    Apparently, the MiG fighters to be returned by Algeria are a major example of these problems that are discussed at length but not resolved. This scandal may not only affect bilateral relations between Russia and Algeria. It has also dealt a heavy blow to Russia's image as arms exporter. This is fraught with big problems for the future. Mistakes on the world's arms market spell enormous losses.

  6. #34
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    February 19, 2008 -- The presidents of Russia and Algeria, Vladimir Putin and Abdelaziz Bouteflika, have met in Moscow to discuss trade and energy co-operation.

    Both sides have agreed that they need to reduce red tape in order to promote business co-operation.

    President Putin expressed his hope that closer Algerian ties with the EU wouldn’t affect conditions for Russian companies.

    Russia and Algeria are two of the biggest natural gas suppliers to Europe and they have previously discussed an OPEC-style gas cartel.

    However, both Russia’s energy giant Gazprom and Algeria's state-owned Sonatrach backed out of a co-operation deal last year without giving a reason.

    Russian Energy Minister Viktor Khristenko says he is still optimistic about future Russia-Algeria projects.

    “Russian companies have recently started a number of projects with Algeria. Last week the Russian oil companies Rosneft and Stroytransgaz approved commercial oil production in two fields in Algeria and also a gas field. Oil extraction is due to begin in 2011. Planned volumes are expected to exceed 3.5 million tonnes,” he said.

  7. #35
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    MOSCOW, February 19, 2008 (Reuters) - Energy was high on the agenda of Russian President Vladimir Putin's meeting with Algerian leader Abdelaziz Bouteflika on Tuesday, but both men avoided mentioning the sensitive issue of an OPEC-style gas cartel.

    "Algeria is the world's fourth gas exporter, Russia is also a major exporter," Putin told Bouteflika after a welcome hug ahead of the Kremlin talks.

    "It is very important for us to be in contact on energy issues, especially now that Algeria is heading the OPEC."

    Bouteflika flew to Moscow for the two-day visit with a group of ministers including current OPEC president Chakib Khelil, also Algeria's minister of energy and mines.

    A growing warmth in ties between Algeria and Russia in the past few years has fuelled market and media speculation that the creation of an OPEC-style gas charter is in the pipeline.

    President Vladimir Putin last year described the concept of a "gas OPEC" as an "interesting idea." Analysts have ruled out the possibility that such a grouping could move world prices to the same degree as OPEC because gas is much harder to transport and a world market in gas does not exist.

    But the prospect of a "gas OPEC" has alarmed the European Union and the United States, which believe such an organisation will threaten global energy security.

    Russia, the world's largest gas exporter, and Iran, Qatar, Venezuela, Nigeria and Algeria have said their annual gas forum - which meets this year in Moscow in June - aims to increase cooperation between key producers.

    But Russian officials have consistently rejected any comparisons between the forum and a would-be "gas OPEC."

    Neither Putin nor Bouteflika mentioned any plans to change the format at the Moscow forum.

    "Our countries are linked by multilateral energy contacts, including the forum of gas exporters," Russian Energy Minister Viktor Khristenko told reporters after Putin and Bouteflika's talk. "We use all the opportunities we can to be in synch including today's visit by the Algerian president."

    Talks between the two leaders have been tainted by Russian media reports this week that Algeria may return 15 MiG fighter jets it bought under a $7.5 billion arms deal it signed with Putin two years ago because of quality concerns.

    Putin and Bouteflika said nothing about arms although Algeria is one of the world's top buyers of Russian weapons and a long-standing arms client.

    But they exchanged a few remarks on a series of problems complicating bilateral ties.

    "By 2012, Algeria and the European Union will create a free trade zone," Putin said. "We would not want to be left behind, in which case our firms could find themselves in a complicated situation," he added.

    But the Algerian leader made clear that good relations with the European Union were paramount.

    "When we started dialogue with the European Union, Morocco and Tunisia already had their own arrangement with them," he said. "We had to start knocking at every door to win similar agreements."

    Bouteflika urged Russian firms, keen to get assets in Algeria, to follow the tactics used by Western partners.

    "Russian companies still lack the understanding of what niches they could take," he told Putin after reiterating that Algeria was not planning to privatise its backbone enterprises.

    "It could be more useful to strike partnership agreements," he added. "This is something we have with Western Europe, but not with Russia."

    A cooperation deal set up last year between Russian gas export monopoly Gazprom and Algeria's state-owned energy firm Sonatrach fell apart at the end of last year when both sides backed out, declining to give a reason.

    Khristenko said the project was not dead yet. "Gazprom and Sonatrach are now working on options to swap assets, take part in extracting and transporting gas," he said.

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